One of the board of directors of Seagull Ltd has proposed that the company adopt the revaluation model for fixed assets.

Some of these assets are difficult to obtain and certain items have increased in value in the current period; however, it is difficult to know what their fair value is.

The director is arguing that fair value will improve the look of the companys statement of financial position and may eliminate the need for depreciation.

Required: Prepare a report to the board on whether it should adopt the directors proposal.